Michael S. Yu, a Law Corp. v. Superior Court

Filed 10/27/20
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION THREE
MICHAEL S. YU, a LAW B304011
CORPORATION, et al.,
(Los Angeles County
Petitioners, Super. Ct. No. BC562415)
v.
THE SUPERIOR COURT OF
LOS ANGELES COUNTY,
Respondent;
BANK OF THE WEST et al.,
Real Parties in Interest.
Petition for writ of mandate. Randolph M. Hammock,
Judge. Petition granted.
Shaw Koepke & Satter, Jens B. Koepke; PB Law Group,
Luan K. Phan and Jody M. Borrelli for Petitioners.
No appearance for Respondent.
Miller Barondess, Brian A. Procel, Mira Hashmall and
Colin H. Rolfs for Real Party in Interest Bank of the West.
Valle Makoff, John M. Moscarino; Greines, Martin, Stein &
Richland and Kent L. Richland for Real Parties in Interest
Commercial Loan Solutions III, LLC and Commercial Loan
Solutions, LLC.
——————————
After the referee in a consensual general reference (Code
Civ. Proc.,1 § 638) filed his decisions in the trial court, but before
entry of judgment on those decisions, the court entertained
motions to set them aside and ordered a new trial to be had by
the court, not by the referee. Michael S. Yu, a Law Corporation,
My Law Holdings, LLC, and Michael S. Yu individually (together
petitioners), who had prevailed before the referee, petitioned this
court for a writ of mandate to compel the trial court to enter
judgment on the referee’s decisions, or alternatively, to direct the
trial court to order a new trial to be heard by the referee. We
issued an order to show cause.
Our review of the statutory scheme compels the conclusion
that the trial court had no authority to review the consensual
referee’s decisions before entering judgment on them. We further
conclude however, that the trial court was authorized to
entertain the motions as postjudgment motions and, based on the
parties’ reference agreement, properly ruled that the new trial
would be heard by the court and not by the referee. Accordingly,
we grant the writ petition.
1All further statutory references are to the Code of Civil
Procedure.
2
BACKGROUND
I. The lawsuit and reference agreement
The underlying lawsuit, brought by petitioners against
Commercial Loan Solutions, LLC, Commercial Loan Solutions
III, LLC (together, CLS), and Bank of The West (the Bank, and
together with CLS, real parties), arose out of the nonjudicial
foreclosure of petitioner’s property. Real parties moved the trial
court to assign all issues in the lawsuit to a referee pursuant to
reference clauses contained in certain forbearance agreements.
The reference clauses provided, in the section entitled “Jury
Waiver and Judicial Reference” (boldface and capitalization
omitted), that the parties waived any right to a trial by jury and
agreed that in “the event any legal proceeding is filed . . . by or
against any party hereto in connection with any
controversy . . . arising out of or relating to this agreement or the
transactions contemplated hereby or the loan
documents . . . . [¶] . . . any claim will be determined by a general
reference proceeding in accordance with the provisions
of . . . sections 638 through 645.1. The parties intend this general
reference agreement to be specifically enforceable in accordance
with . . . section 638.” (Capitalization omitted.) “The referee
shall apply the rules of evidence applicable to proceedings at law
in the State of California and shall determine all issues in
accordance with applicable state and federal law. The referee
shall be empowered to enter equitable as well as legal relief and
rule on any motion which would be authorized in a trial,
including, without limitation, motions for default judgment or
summary judgment. The referee shall report his decision, which
3
report shall also include findings of fact and conclusions of law.”
(Capitalization omitted.)
II. The reference and referee’s decisions
The trial court granted real parties’ motion to compel a
judicial reference and assigned the matter to a retired trial court
judge.2 The lawsuit was tried in two phases. After the liability
phase, each side filed proposed statements of decision, objections,
and other briefing with the referee. The referee then issued a 53-
page decision finding in favor of petitioners on 10 causes of
action. The referee awarded petitioners over $2 million in
damages and granted them equitable relief. In response to the
Bank’s objections, the referee issued a supplemental decision that
corrected typographical errors, but made no substantive changes.
At the close of the punitive damages phase of the trial, the
referee assessed $5 million in punitive damages against the
Bank. The final decision awarded petitioners costs and fees.
Having completed the “consensual judicial reference pursuant to
section 638” (capitalization omitted), the referee filed all of his
decisions with the trial court.
III. Attacks on the referee’s decisions in the trial court
Before the trial court entered judgment on the referee’s
decisions, real parties moved to set them aside, arguing that
Calderwood v. Pyser (1866) 31 Cal. 333 (Calderwood) authorized
the court to set aside a referee’s erroneous conclusions of law
2Defendant Delano Retail Center West, LLC, the
purchaser at the foreclosure sale, was not a party to the
forbearance agreements and so the trial court stayed a quiet title
cause of action involving that defendant. That defendant is not a
party to this proceeding.
4
based on the facts found in the decisions prior to entering
judgment. The Bank alternatively sought entry of judgment on
the decisions before setting them aside.
Petitioners argued that the statutes governing references
obligated the trial court first to enter judgment on the referee’s
decisions before review could occur. Petitioners added that any
new trial or retrial must take place before the referee, not the
court.
The trial court found legal errors in the referee’s decisions.
Yet, the court was “unsure as to whether it is a better practice to
simply enter a judgment in favor of [petitioners] (which
essentially adopts the Referee’s findings), and then subsequently
entertain (and grant) a motion for new trial, per . . . [section] 645,
as opposed to simply granting the pending motions. In either
approach, however, the same result will be reached. [¶] In either
approach, and based upon the record at this time, it is the clear
intent of this Court to not adopt the Referee’s findings and awards
in all respects, and to simply order a new trial on all issues. This
does not mean that this Court is making any opposite finding on
any of the issues. It means only that a new trial is to be held on
all issues, including the claim for punitive damages. This new
trial is to be conducted before this Court.” (Original italics
omitted, and italics added.) The trial court set a new trial date to
retry the entire case.
Petitioners’ writ petition ensued. We stayed the trial and
issued an order to show cause. We now grant the writ petition.
5
DISCUSSION
I. The trial court had no authority to review the referee’s
decisions before judgment was entered on them.
In determining the trial court’s authority with respect to a
reference, we first review the parties’ agreement and the
reference order. (§ 643, subd. (b); see SFPP v. Burlington
Northern & Santa Fe Ry. Co. (2004) 121 Cal.App.4th 452, 463–
464 (SFPP).) Here, the reference provisions give no guidance.
They broadly authorize the referee to determine all issues, to
enter equitable and legal relief, and to rule on any motion “which
would be authorized in a trial.” (Capitalization omitted, italics
added.) The contracts make no mention of review. In the
absence of contractual guidance, we are left to consider the
statutes themselves.
We apply well-established rules of statutory interpretation.
Our task “ ‘ “is to determine the Legislature’s intent so as to
effectuate the law’s purpose.” [Citation.] We begin by examining
the statutory language because the words of a statute are
generally the most reliable indicator of legislative intent.
[Citations.] We give the words of the statute their ordinary and
usual meaning and view them in their statutory context.
[Citation.] We harmonize the various parts of the enactment by
considering them in the context of the statutory framework as a
whole.’ ” (1550 Laurel Owner’s Assn., Inc. v. Appellate Division of
Superior Court (2018) 28 Cal.App.5th 1146, 1151.) “The meaning
and construction of a statute is a question of law, which we
examine de novo.” (Ibid.)
6
A. The relevant statutes
References are governed by sections 638 to 645.1. Section
638 provides in relevant part: “A referee may be appointed upon
the agreement of the parties . . . or upon the motion of a party to
a written contract . . . that provides that any controversy arising
therefrom shall be heard by a referee . . . . [¶] (a) To hear and
determine any or all of the issues in an action or proceeding,
whether of fact or of law, and to report a statement of
decision. [¶] (b) To ascertain a fact necessary to enable the court
to determine an action or proceeding.” Proceedings under
subdivision (a) of section 638 are called general references
because they authorize the referee to consider any or all of the
issues raised, whereas those under subdivision (b) of section 638
are considered special references, as they limit the referee to
specific factual findings to aid the trial court in its determination
of the action. This case is a section 638, subdivision (a) general,
consensual reference.3
Nonconsensual references, not at issue here, are governed
by section 639. Nonconsensual references are always considered
to be special references.
The relevant statutes for our purposes are sections 644 and
645.
Section 644, governing the effect of a referee or
commissioner’s decision, provides in subdivision (a) that in “the
3 “Although a special reference may be made with or
without the consent of the parties, a general reference requires
the parties’ prior consent so as to avoid an unlawful delegation of
judicial power.” (Lindsey v. Conteh (2017) 9 Cal.App.5th 1296,
1303 (Lindsey).)
7
case of a consensual general reference pursuant to Section 638,
the decision of the referee or commissioner upon the whole issue
must stand as the decision of the court, and upon filing of the
statement of decision with the clerk of the court, judgment may
be entered thereon in the same manner as if the action had been
tried by the court.” (Italics added.)
Section 645, titled “Exception and review of referee’s
decision,” expansively states: “The decision of the referee
appointed pursuant to Section 638 or commissioner may be
excepted to and reviewed in like manner as if made by the court.
When the reference is to report the facts, the decision reported
has the effect of a special verdict.” (Italics added.)
Real parties contend that the language of sections 644,
subdivision (a) and 645 preserves to the trial court the power to
correct errors of law before entry of the general referee’s decision
as its judgment. They cite Tarrant Bell Property, LLC v.
Superior Court (2011) 51 Cal.4th 538, 542 (Tarrant), to argue
that when the Legislature juxtaposes compulsory and permissive
verbs “ ‘in close proximity in a particular context, we may fairly
infer the Legislature intended mandatory and discretionary
meanings, respectively.’ ” Accordingly, real parties construe the
relevant statutes to mean that once the referee issues a decision
and files it with the court, it becomes the decision of the court
(§ 644, subd. (a)), who then “treats” it as if it were the court’s own
decision, meaning, real parties argue, that the trial court may in
its discretion enter the decision as its judgment, or not, as the
law permits, just as it would with any decision of the court.
Then, under section 645, real parties assert, the court may review
8
its decision in “like manner as if made by the court.”4 Petitioners
dispute that the trial court has unfettered control over general
referees’ decisions before entry of judgment. All parties believe
the trial court had the power to review the referee’s decisions for
legal error before filing the decisions as its judgment. However,
independently reviewing the statutes here, we disagree and so we
issued our order to show cause to clarify what is a somewhat
muddled area of the law.
B. Statutory construction
1.The reference statutes’ language and framework
In “determining whether the Legislature intended a statute
to be mandatory or permissive, use in the statute of ‘may’ or
‘shall’ is merely indicative, not dispositive or conclusive.”
(Tarrant, supra, 51 Cal.4th at p. 542, italics added; cf. Gutierrez
De Martinez v. Lamagno (1995) 515 U.S. 417, 432, fn. 9 [“shall”
means may in some circumstances].) Thus, we cannot resolve the
question of the trial court’s authority merely by reference to the
mandatory/discretionary dichotomy.
To ascertain legislative intent, we consider the words of
sections 644, subdivision (a) and 645 in the context of the
statutory framework as a whole, and seek “ ‘ “where reasonably
possible, [to] harmonize statutes, reconcile seeming
inconsistencies in them, and construe them to give force and
4 Real parties believe that sections 663a and 659, setting
the time for filing notices of motions for vacatur and new trial,
confirm that the trial court may adjust a general referee’s
decision before entering that decision as its judgment. Sections
663a and 659 do not help the analysis. They do not concern the
time to file the actual motions themselves.
9
effect to all of their provisions.” ’ ” (In re Merrick V. (2004) 122
Cal.App.4th 235, 251.)
Viewing section 644, subdivision (a) harmoniously in the
context of modern civil procedure, all parties agree that the first
clause—–“the decision of the referee or commissioner upon the
whole issue must stand as the decision of the court” (italics
added)—means that the referee’s decision becomes the trial
court’s decision when the referee files it. However, use of the
word may in the second clause—“upon filing of the statement of
decision with the clerk of the court, judgment may be entered
thereon in the same manner as if the action had been tried by the
court” (italics added)—cannot mean that the trial court has
discretion whether to enter judgment. This second clause is
directed at the clerk, as use of the word “entered” indicates.
Entry of judgment is a ministerial act done by the clerk. (Casa de
Valley View Owner’s Assn. v. Stevenson (1985) 167 Cal.App.3d
1182, 1193.) Section 664 specifies that when, such as here, “the
trial has been had by the court, judgment must be entered by the
clerk, in conformity to the decision of the court, immediately upon
the filing of such decision.” (§ 664, italics added.) That is, once
the referee’s statement of decision is filed, it becomes the decision
of the court and “the clerk enters judgment ‘in the same manner
as if the action had been tried by the court’ ” (Knight et al., Cal.
Practice Guide: Alternative Dispute Resolution (The Rutter
Group 2019) ¶ 6:223), i.e., immediately.
It follows that section 645 concerning exception and review,
addresses postjudgment procedure. (See SFPP, supra, 121
Cal.App.4th at pp. 463–464.) In that way, general references
preserve “the court’s power regarding new trial motions and
other postjudgment remedies.” (National Union Fire Ins. Co. v.
10
Nationwide Ins. Co. (1999) 69 Cal.App.4th 709, 716, italics added;
accord, Kajima Engineering and Construction, Inc. v. Pacific Bell
(2002) 103 Cal.App.4th 1397, 1401.) Logically, the language in
section 645 about exception and review, namely that a general
referee’s decision “may be excepted to and reviewed in like
manner as if made by the court” (italics added), means that
aggrieved parties have the option to challenge the general
referee’s decision by bringing a postjudgment motion (see e.g.,
§§ 663a, 657), or by filing an appeal.5
Real parties’ construction is not tenable for three reasons.
First, their reading of the clause, “judgment may be entered
thereon” in section 644, subdivision (a) to afford the trial court
the discretion whether to enter any judgment before reviewing it
for legal errors, contradicts the statute’s requirement that the
general referee’s decision “must stand” as the court’s decision.
(Italics added.) Second, real parties’ construction reads out of the
5 At least one treatise has concluded that the language of
section 645, that the general referee’s decision “may be excepted
to” (§ 645), “probably means that, after a tentative decision is
announced and before the referee’s statement of decision is signed
and filed with the court, the losing party may file objections with
the referee to the proposed findings and conclusions. The referee
must consider and rule on the objections (just as a court considers
and rules on objections to a proposed statement of decision).”
(Knight et al., Cal. Practice Guide: Alternative Dispute
Resolution (The Rutter Group 2019) ¶ 6:231.1, p. 6-73.)
Objections are made to the referee before the decision is filed
because once a general referee files a decision with the trial court,
the decision “must stand as the decision of the court” (§ 644, subd.
(a), italics added) and is “conclusive” (Lewis v. Grunberg (1928)
205 Cal. 158, 162).
11
statute the word “entered.” Third, real parties’ interpretation
cannot be squared with the amendments of 2000 creating the
statutes’ distinction between the effect of a general referee’s
“statement of decision” on the one hand (§ 638, subd. (a)), and
special referee’s “report that includes a recommendation” on the
other hand (§ 643, subd. (c); see Lindsey, supra, 9 Cal.App.5th at
p. 1303).6 We shall explain.
2. The reference statutes’ history
Our conclusion that trial court review of a general
consensual referee’s decision may be had only in postjudgment
proceedings is supported by the relevant history. (Tarrant,
supra, 51 Cal.4th at p. 542.) That history shows that the
Legislature intended that the decisions of general referees be
binding on the trial court and the reports of all other referees be
merely advisory.
a. Statutes of 1851
The Practice Act is the precursor to the Code of Civil
Procedure. In effect at the time the Supreme Court decided
Calderwood, the Practice Act provided in section 182, the
6 In re Marriage of Demblewski (1994) 26 Cal.App.4th 232,
does not affect our conclusion, even though it is relied on by both
sides for their proposition that a party may challenge a general
referee’s decision before it is entered as the judgment. Any
suggestion in Demblewski at page 237 that motions may be made
to the trial court before judgment is entered on the referee’s
decision was based on inapt authority. Martino v. Denevi (1986)
182 Cal.App.3d 553, 556–557 is a special reference case, and
Salka v. Dean Homes of Beverly Hills, Inc. (1993) 23 Cal.App.4th
952 was superseded by grant of review.
12
antecedent of section 638, that a “reference may be ordered upon
the agreement of the parties filed with the Clerk, or entered in
the minutes: [¶] 1st. To try any or all of the issues in an action
or proceeding, whether of fact or of law; and to report a judgment
thereon. [¶] 2d. To ascertain a fact necessary to enable the
Court to proceed and determine the case.” (Stats. 1851, ch. VI,
p. 79, italics added.)7
The derivation of section 639 is Practice Act section 183,
which provided that when the parties did not consent, the trial
court could direct a reference in the following cases: “1st. When
the trial of an issue of fact requires the examination of a long
account . . . ; in which case the referees may be directed to hear
and decide the whole issue, or report upon any specific question
of fact . . .; [¶] 2d. When the taking of an account is necessary
for the information of the Court before judgment, or for carrying
a judgment or order into effect: [¶] 3d. When a question of
fact . . . arises . . .; or, [¶] 4th. When it is necessary for the
information of the Court in a special proceeding.” (Stats. 1851,
ch. VI, § 183, p. 79.)8
Section 187 of the Practice Act then read, “The referees
shall make their report within ten days after the testimony
7 Section 182 of the Practice Act was amended during the
1865 to 1866 legislative session to add the words “a finding”
before “and judgment thereon” and to change “1st” to “First–” and
“2d” to “Second–.” (Stats. 1866, ch. DCXIX, § 3, pp. 844–845.)
8 Sections 184 through 186 of the Practice Act concerned
the qualifications for referee (§ 184), the grounds for objections to
the choice of referee (§ 185), and how the court addresses
objections to the appointment of referees (§ 186).
13
before them is closed. Their report upon the whole issue shall
stand as the decision of the Court, and upon filing the report with
the Clerk of the Court, judgment may be entered thereon in the
same manner as if the action had been tried by the Court. The
decision of the referees may be excepted to and reviewed in like
manner as if made by the Court. When the reference is to report
the facts, the report shall have the effect of a special verdict.”
(Stats. 1851, ch. VI, § 187, p. 80, italics added.)
b. Statutes of 1872
The Legislature enacted the Code of Civil Procedure in
1872, supplanting the Practice Act. The Legislature split
Practice Act section 187 into three separate sections that referred
back to section 187. They provided, section “643. (§187.) The
referees or Commissioner must report their findings in writing to
the Court within twenty days after the testimony is closed, and
the facts found and conclusions of law must be separately stated
therein. [¶] 644. The finding of the referee or commissioner
upon the whole issue must stand as the finding of the Court, and
upon filing of the finding with the Clerk of the Court, judgment
may be entered thereon in the same manner as if the action had
been tried by the Court. [¶] 645. The findings of the referee or
commissioner may be excepted to and reviewed in like manner as
if made by the Court. When the reference is to report the facts,
the finding reported has the effect of a special verdict.” (Stats.
1872, ch. VI, §§ 643–645, pp. 166–167.)
c. The modern version
In 2000, the Legislature amended section 644, subdivision
(a) to refer specifically to “a consensual general reference
pursuant to Section 638,” and then adjusted pertinent words in
14
the early section 644 and Practice Act section 187 to read (with
changes in italics), “the decision of the referee or commissioner
upon the whole issue must stand as the decision of the court, and
upon filing of the statement of decision with the clerk of the court,
judgment may be entered thereon in the same manner as if the
action had been tried by the court.” (Italics added.) (See Legis.
Counsel’s Dig., Amends. to Assem. Bill No. 2912 (1999–2000 Reg.
Sess.).) The Legislature also changed section 645 by applying it
specifically to section 638 consensual references, and labeling the
consensual referee’s report a “decision.” (Legis. Counsel’s Dig.,
Amends. to Assem. Bill No. 2912 (1999–2000 Reg. Sess.) By
substituting “must stand” for “shall stand” and “decision” and
“statement of decision” for “report” and “findings” in sections 644,
subdivision (a) and 645, the Legislature emphasized that the
consensual general referee’s decision was not simply a finding
and report for the trial court’s adjustment, but was obligatorily
the court’s decision.
More important, however, is the crucial difference between
the Practice Act and the original Code of Civil Procedure on the
one hand, and the modern Code of Civil Procedure on the other
hand, that was created by the Legislature’s addition of sections
643, subdivision (c) and 644, subdivision (b) in 2000. (Stats.
2000, ch. 644, §§ 8 & 9.) Subdivision (c) of section 643 tightly
controls the conduct of section 639 nonconsensual references by
outlining the contents of the referee’s report, providing for
objections, and specifying the extensive authority of the trial
court upon receipt of the nonconsensual referee’s report: After
specifying the time for filing responses to the objections, section
643, subdivision (c) provides that the “court shall review any
objections to the report and any responses submitted to those
15
objections and shall thereafter enter appropriate orders. Nothing
in this section is intended to deprive the court of its power to
change the terms of the referee’s appointment or to modify or
disregard the referee’s recommendations, and this overriding
power may be exercised at any time, either on the motion of any
party for good cause shown or on the court’s own motion.” (Italics
added.)
Then section 644, subdivision (b) establishes that for all
references other than section 638 consensual general references,
“the decision of the referee or commissioner is only advisory. The
court may adopt the referee’s recommendations, in whole or in
part, after independently considering the referee’s findings and
any objections and responses thereto filed with the court.”
(Italics added.)
These amendments in 2000 to sections 643 and 644 draw a
clear distinction between consensual references (§ 638) and
nonconsensual references (§ 639). For consensual references,
section 643 reads simply, “(b) A referee appointed pursuant to
Section 638 shall report as agreed by the parties and approved by
the court,” and section 644, subdivision (a) establishes, as noted,
that the consensual general referee’s decision “must stand as the
decision of the court.” The Legislature added the amendments in
2000 for the express purpose of providing that for all references,
other than consensual references, “the decision of the referee or
commissioner is only advisory, and that the court may adopt the
referee’s recommendations in whole or in part after independently
considering the referee’s findings and any objections and
responses thereto filed with the court.” (Legis. Counsel’s Dig.,
Amends. to Assem. Bill No. 2912 (1999–2000 Reg. Sess.), italics
added; § 644, subd. (b).) Then, by limiting section 645 to general
16
references, the Legislature necessarily confirmed that review of
such referees’ decisions could only occur by postjudgment
procedure.
We glean from this evolution of the reference statutes—
from the Practice Act to the modern Code of Civil Procedure—
that the Legislature intended in the modern era to give the trial
court vast control over nonconsensual referees, from their
appointments to their reports, while leaving the authority to
delineate consensual general referees’ work and decisions to the
litigants by contract. Neither the Practice Act nor the early
version of the Code of Civil Procedure contained an equivalent to
current sections 643, subdivision (c) and 644, subdivision (b). Nor
has the Legislature granted similar power to the trial court to
control or alter consensual general referees’ decisions, leading to
the inescapable conclusion that the Legislature did not intend to
confer any power of review on the trial court until after entry of
judgment on the decision under section 645.9 The statutory
scheme created by the Legislature after 2000 conferred expansive
power on the trial court to review and adjust advisory reports of
nonconsensual referees before entering them as judgments, while
keeping consensual general reference decisions final and binding
on the court.
Numerous cases confirm that the “statutes carefully
preserve the distinction of special and general reference to
9 The Bank cites the annotations to the 1872 version of
section 654, which stated that the referee’s report could not be
“attacked except for error or mistake of law, shown on its face, or
by motion for new trial.” That annotation is obsolete given the
modern amendments to sections 643 and 644.
17
comply with the constitutional mandate; a general reference has
binding effect, but must be consensual, whereas a special
reference may be ordered without consent but is merely advisory,
not binding on the superior court.” (Aetna Life Ins. Co. v.
Superior Court (1986) 182 Cal.App.3d 431, 436; Ellsworth v.
Ellsworth (1954) 42 Cal.2d 719, 723; Jovine v. FHP, Inc. (1998)
64 Cal.App.4th 1506, 1522–1523; Lindsey, supra, 9 Cal.App.5th
at pp. 1303–1304; see Estate of Bassi (1965) 234 Cal.App.2d 529,
536.) Indeed, it has long been understood that “mandamus will
lie to compel the court to enter judgment on the general referee’s
report.” (Knight et al., Cal. Practice Guide: Alternative Dispute
Resolution (The Rutter Group 2019) ¶ 6:246, p. 6-77.)
Lewis v. Grunberg, supra, 205 Cal. 158, cited by petitioners,
is particularly instructive as it postdates enactment of the Code
of Civil Procedure. The Supreme Court in Lewis cited In re
Riccardi (1926) 80 Cal.App. 66, Weavering v. Schneider (1921) 52
Cal.App. 182, and Clark v. Millsap (1926) 197 Cal. 765, as
“holding the findings conclusive where the reference is general, as
in the case at bar. [¶] ‘Upon the filing of the findings of the
referee in this cause, judgment should have been entered thereon
in accordance with the findings, and for any error committed by
the referee, the remedy of the aggrieved party was by motion for a
new trial, or other appropriate proceeding.’ ” (Lewis, at p. 162,
italics added.) Indeed, where the reference is a general one, the
decision filed with the trial court “ ‘stand[s] as the decision of the
court.’ ” (Lindsey, supra, 9 Cal.App.5th at p. 1304.) As such it is
18
directly appealable as a binding decision, whereas the report of a
special referee is not. (Ibid.)10
The general, consensual referee’s decisions here were
binding and stood as the decision of the court when issued, with
the result judgment should have been entered thereon
immediately by the clerk. (§§ 644, subd. (a) & 664.) The
aggrieved party’s remedy for any error committed by the referee
was by a postjudgment proceeding or appeal.
C. Calderwood is not controlling.
Real parties relied primarily on Calderwood, supra, 31 Cal.
at page 337 for their contention that sections 644, subdivision (a)
and 645 give the trial court authority to review a general
referee’s decision for legal errors before entering the decision as
its judgment.
The action in Calderwood, supra, 31 Cal. at page 335 was
tried by a referee who went beyond the issues and found an
10 The cases real parties rely on actually support our
construction. In National Union Fire Ins. Co. v. Nationwide Ins.
Co., supra, 69 Cal.App.4th at pages 714 to 716, the trial court
“adopted” the referee’s decision “as the decision of the court, in its
entirety” which “preserved the court’s power regarding new trial
motions and other postjudgment remedies.” Kajima Engineering
and Construction, Inc. v. Pacific Bell, supra, 103 Cal.App.4th at
page 1401, quoted the above language. In Old Republic Ins. Co.
v. St. Paul Fire & Marine Ins. Co. (1996) 45 Cal.App.4th 631, 637
to 638, the appellate court analyzed the parties’ contract and
concluded they agreed to binding arbitration not a general
reference. The court noted that general references afford the
trial court the power to alter or vacate a referee’s award “upon a
motion for a new trial.” (Id. at p. 637, italics added.)
19
additional fact that the lawsuit had abated by the plaintiff’s
divorce and could not be re-prosecuted absent revival requiring
the court’s permission. Hence, the referee reported a judgment
dismissing the lawsuit for lack of a revivor. (Ibid.) The Supreme
Court found that the referee had erred in finding the action had
abated. (Id. at p. 335.) Concluding that “the referee erred in his
conclusions of law” and that on “the facts found upon the issues
made by the pleadings the plaintiffs were entitled to judgment”
(id. at p. 336), the Calderwood court affirmed the trial court’s
order granting a new trial (id. at p. 338).
In dicta, Calderwood, supra, 31 Cal. 333 discussed the trial
court’s authority to set aside a referee’s report for legal error
before entering judgment. “We see no good reason why the County
Court might not have set aside the conclusions of law reported by
the referee . . . . The referee had made his report, but no
judgment had been entered upon it, and it was still under the
control of the Court. . . . [citation] . . . Where a referee finds the
facts upon all the issues, draws an erroneous conclusion of law
from the facts found, and reports a judgment in accordance with
such conclusion, before judgment [is] entered and while the
report is still under the control of the Court, we can perceive no
objection to the Court’s setting aside the erroneous conclusion, and
directing the proper judgment to be entered. . . . The Court,
however, under an erroneous impression as to the application of
the principle of the case cited, thought otherwise, and directed
the judgment to be entered, and, on application of plaintiffs,
afterwards granted a new trial on the ground indicated.” (Id. at
pp. 337–338, italics added.) Only two published California
opinions issued in the 148 years since enactment of the Code of
Civil Procedure cite Calderwood for the proposition that a trial
20
court may modify a section 638 referee’s decision for erroneous
legal conclusions before entering judgment on that decision.
(Estate of Bassi, supra, 234 Cal.App.2d 529, 539 & Clark v.
Rancho (1989) 216 Cal.App.3d 606, 625.)11
Calderwood provided no indication whether the reference
there was consensual or nonconsensual, or general or special,
which as explained, are treated differently in the modern era for
purposes of trial-court review. The only case that actually
addressed the question is Jackson v. Allen (1921) 55 Cal.App.
257, 258, which baldly stated that Calderwood involved a general
reference under Practice Act section 183, subdivision (1).
We conclude that Calderwood, supra, 31 Cal. 333 is not
controlling, irrespective of the kind of reference involved there.
As petitioners observe, Calderwood is factually distinguished
because the appeal there was “from an order granting a new
11 Estate of Bassi, supra, 234 Cal.App.2d 529, and Clark v.
Rancho, supra, 216 Cal.App.3d 606, cited by real parties did not
analyze the type of reference at issue in Calderwood.
Furthermore, Estate of Bassi, at page 539 is distinguishable
because the appellate court determined that the parties there
had stipulated to a special reference. Thus, the comments in
Estate of Bassi citing Calderwood about the trial court’s authority
in general references are dicta. Bagdasarian Prods., LLC v.
Twentieth Century Fox Film Corp. (9th Cir. 2012) 673 F.3d 1267,
cited by real parties does not affect our conclusion. Apart from
the fact the “ ‘decisions of the Ninth Circuit Court of Appeals . . .
are not binding on us’ ” (Victrola 89, LLC v. Jaman Properties 8
LLC (2020) 46 Cal.App.5th 337, 357, fn. 8), Bagdasarian, at page
1271 actually cited Calderwood as authority for its assertion that
“the case may be reviewed by the district court upon a motion for
new trial or other post-judgment motions.” (Italics added.)
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trial” (id. at p. 335), and the Supreme Court held, “Order
granting new trial affirmed” (id. at p. 338). Thus, Calderwood’s
comments about what the trial court might have done prior to
entering judgment are dicta. More important, regardless of the
nature of the reference there, Calderwood is not controlling given
the changes to the reference statutes after enactment of the Code
of Civil Procedure and the Legislature’s express purpose in
adding sections 643, subdivision (c) and 644, subdivision (b).
Accordingly, Calderwood did not give the trial court here
authority to review the referee’s decisions before judgment was
entered on those decisions.
II. The trial court did not apply the incorrect standard of
review.
Petitioners argued in their writ petition that the trial court
applied the incorrect standard of review in that it did not
appropriately defer to the referee’s factual findings. They quote
from what they call the “heart” of the court’s ruling that “the
gravamen of the referee’s [statement of decision] is based upon a
fundamental finding of fact (which was a clear error of law in
that it was not supported by the record or evidence presented), to
wit, that there was a legally “ ‘enforceable’ ” oral agreement of
forbearance between [petitioners] and [Bank].”
Yet, this quote omits an important statement from the
ruling. Just before reaching the above conclusion, the trial court
stated, “this Court finds and concludes that the Referee’s
[statement of decision] is fundamentally unsound and unjust, as
it is based upon several errors of law.” (Italics added.) That is,
contrary to petitioners’ argument, the trial court did not
determine there was insufficient evidence of an oral forbearance
agreement. Rather, after properly deferring to the referee’s
22
factual findings, the court concluded that it was legal error to
find on those facts that the agreement was enforceable.
“ ‘Whether or not a valid binder exists is a question of fact insofar
as a finding comprehends issues relating to the credibility of
witnesses or the weight of the evidence, but a question of law
insofar as a finding embraces a conclusion that such factual
elements do not constitute a valid oral binder.’ [Citation.]
‘Whether undisputed facts establish the existence of a binder is a
question of law.’ ” (Chicago Title Ins. Co. v. AMZ Ins. Services,
Inc. (2010) 188 Cal.App.4th 401, 419.) No error is shown.
III. The trial court did not err in ordering that the new trial
would be heard by it and not by the referee.
Real parties moved to set aside the referee’s decision and
the trial court decided “to simply order a new trial on all issues.”
Petitioners’ writ assigns as error the subsequent portion of the
trial court’s order that the new trial be conducted by the trial
court rather than by the referee. In support of that order, real
parties cite Tarrant, supra, 51 Cal.4th at page 543, which stated
that “section 638 unmistakably shows a legislative intent to give
trial courts discretion not to enforce valid reference agreements.”
Real parties also cite the trial court’s inherent supervisory and
administrative powers, and authority to control the litigation
before it.
Reviewing the parties’ reference agreement (§ 643, subd.
(b); SFPP, supra, 121 Cal.App.4th at pp. 463–464), it authorized
the referee to “report his decision, which report shall also include
findings of fact and conclusions of law.” The agreement
empowered the referee to “rule on any motion which would be
authorized in a trial, including without limitation, motions for
default judgment or summary judgment.” (Capitalization
23
omitted and italics added.) The agreement clearly does not
authorize the referee to take any further action after he filed his
decisions, such as in a postjudgment proceeding.
Daverkosen v. Kelley (1872) 43 Cal. 477, issued the same
year as the Code of Civil Procedure was enacted, is on point. Just
as here, the reference agreement in Daverkosen authorized the
referee “ ‘to take the evidence and report a judgment.’ ”
(Daverkosen, at p. 478.) The trial court granted a new trial to be
tried by the same referee. The Supreme Court agreed with the
appellant that that order was erroneous, stating simply, “Prior to
the last order the referee had taken the testimony and reported a
judgment. The powers conferred by the stipulation were then
exhausted. When the new trial was granted the parties were
restored to the position which they occupied when the issues were
originally made. Either party could then demand a trial by jury,
or object to a reference, which, in an action at law, can only be
made by mutual consent.” (Ibid.)
Petitioners rely on Clark v. Rancho, supra, 216 Cal.App.3d
at page 625, which held that the referee there possessed the
power both to entertain and decide a motion for new trial and to
conduct any new trial. Clark distinguished Daverkosen v. Kelley
because unlike the reference agreement in the latter case, the
stipulation in Clark provided, “ ‘for a complete and final
adjudication.’ ” (Clark, at p. 623.) The powers of the referee here
are akin to those of the referee in Daverkosen, supra, 43 Cal. at
page 478, and so Daverkosen is controlling.
Under the parties’ agreement here, the referee’s powers
were exhausted when he filed his decisions with the trial court.
Real parties sought a new trial by the court, effectively objecting
to the reference. In the absence of mutual consent for a new
24
reference, therefore, the trial court properly ruled that the new
trial be conducted before the court.
DISPOSITION
Let a peremptory writ of mandate issue ordering
respondent trial court to (1) vacate its November 25, 2019 order
granting real parties’ motions to set aside the decisions of the
referee, (2) enter a new and different order denying the motions
to set aside the referee’s decisions, and (3) enter judgment on the
referee’s decisions. The trial court shall thereafter enter its order
setting a new trial to be conducted before the trial court. The
stay dated March 20, 2020 is lifted upon issuance of the
remittitur. The parties are to bear their own costs of this
proceeding.
CERTIFIED FOR PUBLICATION.
DHANIDINA, J.
We concur:
EDMON, P. J.
EGERTON, J.
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